Cencorp - Company Announcement

CENCORP OYJ: CENCORP CORPORATION DISCLOSES INFORMATION RELATED TO ITS FINANCIAL POSITION AND FINANCING NEEDS

CENCORP CORPORATION      STOCK EXCHANGE RELEASE        DECEMBER 10, 2013 AT
10:05 FINNISH TIME 



CENCORP OYJ: CENCORP CORPORATION DISCLOSES INFORMATION RELATED TO ITS FINANCIAL
POSITION AND FINANCING NEEDS 



Cencorp Corporation ("Cencorp" or the "Company") has published a stock exchange
release on December 9, 2013 on the share issue (the "Share Issue") resolved by
its Board of Directors to its shareholders and to the holders of its
convertible bonds in order to strengthen the capital structure of the Company,
to improve the liquidity of the Company, particularly to repay its due trade
payables, and to carry out investments related to its clean energy business
plan, on the terms of the Share Issue and on the approval and availability of
the prospectus related to the Share Issue. The prospectus consists of the
registration document (the "Registration Document") and of the summary and the
securities note (the "Securities Note"; the Registration Document and the
Securities Note together the "Prospectus") dated December 9, 2013. 



The Company discloses by this stock release in addition to the previously
disclosed information more detailed information on the Company's financial
position and financing needs as described in the Prospectus. 



One of the most significant risks of the Company is the sufficiency of its
working capital. In light of the available forecasts, the financial position of
the Company will remain tight. According to the understanding of the management
of the Company, during the next twelve (12) months the working capital and
available funds of the Company will not be sufficient, on the one hand, to
ensure the normal business of the Company and, on the other hand, to carry out
the investment plan in accordance with the strategy of the Company. The Company
has overdue trade payables in the total amount of approximately 2.8 million
euros which the Company intends to pay partly by the funds raised in the Share
Issue and partly by the cash flow from its business operations. Additionally,
the Company has loans maturing during the next twelve (12) months for the total
value of 6.9 million euros, of which significant part (4.9 million euros) will
mature on January 31, 2014. The loans maturing on January 31, 2014 consist of
the export credit limit and credit account limit granted to the Company by
Danske Bank Oyj and the loan granted to the Company by Savcor Invest B.V. and
the convertible bond granted to the Company by Savcor Group Oy which
convertible bond is intended to be used by Savcor Group Oy to set-off its
subscription price in the Share Issue related to the subscription to be made by
it on the basis of its conditional subscription commitment as disclosed
previously. 



The Company tries to negotiate on the postponement of the maturity dates of its
financing agreements and has already started negotiations with Danske Bank Oyj
on the renewal of its export credit limit, bank guarantee limit and credit
account limit so that they would remain in force also after January 31, 2014 in
their current sizes for the next 3-6 months during which time period the
parties would negotiate again on their further renewal in accordance with the
past practice of the Company and Danske Bank Oyj. The Company has also started
negotiations with Savcor Group Oy and Savcor Invest B.V. on the postponement of
the maturity dates of the financing agreements maturing on 31 January, 2014. 



The total maximum amount of the Share Issue disclosed by the Company on
December 9, 2013 is approximately 4.9 million euros. The Company tries to raise
at least 2.5 million euros of new funds (excluding the part of the subscription
price to be paid by set-off) in the Share Issue, of which approximately 2.0
million euros is intended to be used for covering the working capital needs of
the normal business operations of the Company and for improving the liquidity
of the Company, and particularly to pay its overdue trade payables, and
approximately 0.5 million euros for carrying out the investments related to the
clean energy business plan. Pursuant to the estimate of the Company on the date
hereof, carrying out the investments related to the Company's clean energy
business plan will, in addition to the aforementioned financing of 0.5 million
euros, require new financing in the approximate amount of 9.5 million euros, of
which approximately 5.0 million euros needs to be raised and used during the
next (12) months following the date hereof. 



In case the Company is successful in raising in the Share Issue more than the
minimum amount of 2.5 million euros (of which 2.0 million euros is intended to
be used for covering the working capital required by the normal business
operations of the Company and for improving the liquidity of the Company), the
excess amount is intended to be used for the investments related the Company's
clean energy business plan. 



In case the Company manages to raise at least 2.5 million euros of new funds
(excluding the part of the subscription price to be paid by set-off) in the
Share Issue (of which 2.0 million euros is intended to be used for covering the
working capital required by the normal business operations of the Company and
for improving the liquidity, and particularly to pay its overdue trade
payables), pursuant to the understanding of the management of the Company on
the date hereof the Company shall thereby ensure the sufficiency of its working
capital for the period of next twelve (12) months, provided that the Company
has at its disposal at least the credit limits corresponding to the current
limits of 4.0 million euros; the Company has managed to negotiate postponement
of the maturity dates also for its other loans maturing on January 31, 2014 to
the extent those loans are not used for setting off the subscription price in
the Share Issue; the Company has in its use separate financing for the
investments pursuant to its investment program as planned; and the cash flow of
the business operations of the Company will turn positive during the second
half of the year 2014, at the latest. 



Based on the current information available to the Company, the Company believes
that the cash flow of the business operations of the Company will turn positive
during the second half of the year 2014 with the Company's current costs
structure, provided that the Company achieves its minimum turnover objective
for 2014 the likelihood of which is in the Company's view reasonable given its
previous turnover levels, recent order book and tender activity. 



In case the cash flow of the Company will not turn positive at the latest
during the second half of the year 2014 pursuant to the objective of the
Company; and/ or the Company does not have at least the credit limits
corresponding to the current limits of 4.0 million euros; or the Company does
not manage to negotiate postponement of the maturity dates for its maturing
loans; and/or the Company does not manage to acquire separate financing for its
investments pursuant to the investment program of the Company (from clients,
partners, venture capital investors or from other third parties such as Tekes -
the Finnish Funding Agency for Technology and Innovation), the Company may be
obliged to reconsider the scope of its clean energy business and to lower its
growth target for the future. As other alternatives, the Company has
considered, and will consider in the future, the possibilities to divest such
business operations that do not belong to its key business operations pursuant
to the current strategy of the Company. Such business operations are, inter
alia, RFID and flexible electronics for mobile phones businesses. At the
moment, the Company is investigating possible buyers for these business
operations as disclosed previously. 



In case the Company is not able to raise the aforementioned new funds needed by
it in the minimum amount of 2.5 million euros in the Share Issue, or in case
one or more of the aforementioned other requirements, such as cash flow turning
to positive during the second half of the year 2014; renewal of the loans
maturing on January 31, 2014; financing from the clients, partners or venture
capital investors; or selling of the non-key businesses of the Company, would
not be realized to sufficient extent, the Company may have to change
significantly its strategy or objectives or schedules thereof, or in the worst
case, the situation may lead to the corporate reorganization of the Company or
in case of a failure of such corporate reorganization, to the bankruptcy. 



The risks related to the Company's financial position, financing needs and
continuity of its business operations have been described in more detail in the
Prospectus dated December 9, 2013. 



The Prospectus is available from December 10, 2013 on at the head office of the
Company, at Insinöörinkatu 8, 50100 Mikkeli, Finland during the normal office
hours; at the reception of NASDAQ OMX Helsinki Ltd (2nd Floor), at Fabianinkatu
14, 00130 Helsinki, Finland, during the opening hours of NASDAQ OMX Helsinki
Ltd; and in the electronic form on the website of the Company,
www.cencorp.com/cencorp-s-investor-site/ and on the website of Evli Pankki
Corporation, www.evli.com. 



The shareholders, convertible bond holders and other investors are requested to
familiarize themselves in more details with the information included in the
Prospectus. 



In Mikkeli, December 10, 2013





CENCORP CORPORATION





For more information:



Iikka Savisalo

President and CEO

Cencorp Corporation



Tel.: +358 40 521 6082

Email: iikka.savisalo@cencorp.com





Distribution

NASDAQ OMX Helsinki Ltd

Main media



Cencorp Corporation is a leading provider of industrial automation solutions.
The equipment included in the product portfolio designed for depaneling,
odd-form assembly, testing and laser materials processing substantially
improves the efficiency of customers' production. Cencorp has selected clean
technology as its other business segment, especially photovoltaic solutions.
Cencorp manufactures and sells photovoltaic modules, based on Cencorp´s own
technology, key components of photovoltaic modules as well as their
manufacturing technology. The product range also includes EMI shielding
solutions, RFID antennas, other flexible circuits including for example
conductive back sheets used in photovoltaic modules and mobile phone antennas.
Cencorp's head office is located in Mikkeli, Finland. The company is part of
the Finnish Savcor Group. 



Please note:

The information in this stock exchange release is not intended to be disclosed
or distributed, directly or indirectly partly or in whole, in Australia, South
Africa, Japan, Hong Kong, Canada or in the United States or in any other
country where the disclosure of this stock exchange release would be contrary
to law. 



The information of this stock exchange release does not constitute an offer to
sell securities in the United States, and securities subject to this release
shall not be offered or sold in the United States unless they have been
registered in accordance with the Securities Act of 1933 (including amendments)
and provisions and regulations issued under the Act or unless the registration
requirement has been waived. No offer to sell the securities or no part of such
offer will be registered in the United States, and the securities will not be
offered to the public in the United States. 



This release must not be interpreted as a direct or indirect offer to sell or
acquire the securities, and none of the securities will be sold in areas where
it is contrary to law to offer, acquire or sell securities before the
registration of such securities or before an exception has been granted or an
approval has been issued in accordance with the applicable securities
legislation.